Having carried debt into retirement, seniors are struggling to balance debt repayment with rising food, energy, medical and living expenses.

Seniors Struggling under Severe Debt Load

Seniors continue to be the fastest-growing risk group among all age groups. Debtors aged 60 and older now make up 12% of all insolvent debtors, up from 10% two years earlier and continuing a trend that started with our 2011 study.

On average, seniors carry a total unsecured debt load of $64,379, which is 22% more than the average Joe Debtor. They have the highest unsecured debt-to-income ratio of all age groups, at 251%.

Debtors 60+2015-20162013-2014
% of all debtors12%10%
Unsecured debt$64,379$69,031
Debtor income$2,141$2,215
Unsecured debt-to-income251%260%
% own home17%25%
% use payday loans11%9%
Payday loan debt$3,593$3,693

Seniors continue to struggle with credit card debt accumulated over a lifetime. They have the highest credit card debt of all age groups, at an astounding $25,596. Credit card debt is their largest debt load, accounting for 40% of their total unsecured debt.

Unfortunately, even minimum credit card payments use up a significant portion of their fixed income. The need to keep up with debt repayment along with increasing living costs has resulted in seniors turning to payday loans in record numbers. More than one in ten (11%) insolvent senior debtors have an outstanding payday loan, and the use of payday loans by seniors continues to rise. Borrowing against a stable pension, seniors also have the highest total payday loan debt of all age groups, at $3,593.

The insolvent senior debtor is not the affluent senior who has just failed to cut back in his or her retirement. Today’s insolvent senior is struggling with rising food and energy costs, medical costs, and other living expenses, all while living on a fixed, and often reduced, income.

Senior debtors aged 60 and older are, in fact, supporting higher unsecured debt loads on significantly lower income. The average income for insolvent debtors aged 60 and older is only $2,141; 10% below Joe Debtor, while his average unsecured debt is 22% higher. Even more concerning, the average senior debtor’s total household income fell by more than 7% since our last study.

Senior debtors in our study are among the most financially at-risk in our communities. Today’s senior debtors are more likely than in our previous study to be widowed (17% versus 14%); divorced (30% versus 28%); retired and living on a fixed income (56% versus 54%); or on disability (5.5% versus 4.6%). Almost six in ten (59%) live in a single-person household, up from 53% in our 2015 study.

Heavily indebted seniors also have little in the way of emergency or retirement savings to fall back on. Only 44% of senior debtors have any retirement nest egg, and as for those who have an RRSP, their average RRSP savings amounts to just $20,207. Less than 1% of senior debtors have any other form of investment reserves. Those who do, have only $18,447 in savings and securities, far less than their total unsecured debt.

Tax debt is an issue for almost half of all seniors. In our study, 47% of all seniors have tax debt; for those who do their total tax liability amounted to $27,329, 33% of their total unsecured debt. We include additional information about tax-debt induced insolvencies later in this report.

After young debtors, senior debtors are the most likely group to blame financial mismanagement as a cause of their financial problems; however, 17% also list health concerns as a cause. It is their desire to accept personal responsibility and deal with their debt that contributes to the decision for many seniors to file a proposal or bankruptcy even though their only source of income, their pension, cannot be garnisheed.

The Risk of Carrying Debt into Retirement

Following close behind seniors in terms of debt load are pre-retirement debtors (those aged 50–59), having an average unsecured debt of $62,815. More likely to own a home (21% of pre-retirement debtors own a home compared to 17% for Joe Debtor), slightly more likely to have some money set aside for retirement (50% of debtors aged 50–59 have RRSP savings compared to 44% for Joe Debtor), the pre-retirement debtor is struggling with the conflicting goals of saving for retirement, paying down debt and helping his remaining dependants financially. One in four (24%) pre-retirement debtors still have at least one dependant at home.

Pre-retirement debtors also face an added risk of a sudden drop in income due to an unexpected illness. One in ten insolvent debtors aged 50–59 were on disability and 19% listed health reasons as a primary cause of their insolvency.

With more baby boomers aging and entering retirement with debt and little to no savings, the rate of insolvency among seniors will continue to rise.

THE SENIOR DEBTOR (60+)
Personal Information
Male52%
Female48%
Marital status
Married/Common Law40%
Divorced or Separated30%
Widowed17%
Single13%
Average family size1.5
Likelihood of having dependent6%
Average monthly income$2,141 net of deductions
Total unsecured debt$64,379
Unsecured debt-to-income ratio251%
Likelihood they own a home17%
Average mortgage value$173,799
Detailed Information on the amount of average unsecured debt:
Personal loans$20,628
Credit cards$25,596
Taxes$12,895
Student loans$177
Other$5,083

THE PRE-RETIREMENT DEBTOR (50-59)
Personal Information
Male55%
Female45%
Marital status
   Married/Common Law38%
   Divorced or Separated36%
   Widowed3%
   Single23%
Average family size1.7
Likelihood of having dependent24%
Average monthly income$2,388 net of deductions
Total unsecured debt$62,815
Unsecured debt-to-income ratio219%
Likelihood they own a home21%
Average mortgage value$181,241
Detailed Information on the amount of average unsecured debt:
Personal loans$22,043
Credit cards$20,984
Taxes$12,122
Student loans$769
Other$6,897